Microsoft Bought LinkedIn Part II: What We’ve Seen So Far

Six months after Microsoft released plans to purchase LinkedIn for more than $26 billion (see our Part I blog post) we have learned even more about why this high-price-tag acquisition was so valuable. Microsoft recently announced that LinkedIn Founder Reid Hoffman has accepted an invitation to join its board.

After the acquisition, Microsoft released various goals set for its LinkedIn integration plan, including specific areas where the company will leverage this professional social network:

Microsoft will integrate LinkedIn’s identity and network, into Microsoft’s Outlook and the rest of the Office Suite

LinkedIn notifications will appear within the Windows Action Center

When LinkedIn members draft résumés in Word, they can update their profiles, and discover and apply to jobs on LinkedIn

LinkedIn Learning will be available across the Office 365 and Windows ecosystem

LinkedIn will extend the reach of Sponsored Content across Microsoft properties

Enterprise LinkedIn Lookup will be powered by Microsoft Active Directory and Office 365

Initially, it was hard to gauge the ingenuity of this merger. CEO Satya Nadella is only three years into a turnaround that many believed was not possible. When he was first promoted to CEO back in 2014, Microsoft was in bad shape, and just six months prior to that, the company had even posted its first-ever quarterly loss.

Here was the key breakdown: Microsoft’s core business was declining. Unfortunately, this decline was set in motion more than a decade ago, when most all ventures owned and ran Windows-powered servers and PCs. Microsoft had set-up a very comfortable shop in the middle of an innovative dilemma and had few incentives to invest in future businesses that could upset the business it was already in. It also had a poor reputation, particularly in Silicon Valley, as a company that didn’t partner with outsiders or newcomers. It derided the open-source community and looked down at tech start-ups.

As a board member, Hoffman will serve as Microsoft’s “Ambassador in the Valley.” This ripple effect has the strong potential to be incredibly valuable as Microsoft competes for partners and rising-star talent.

Now three years later, Microsoft has been profitable for the past four quarters, and in January, it exceeded analyst expectations and doubled its revenue from cloud-computing platform and service Azure. Its search engine, Bing, has a hold on one-fifth of the search engine market (and even more, if you include AOL and Yahoo search engines, which are both powered by Bing).

Stay tuned for more on this interesting merger!

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